In some cases, buildings are designed with the thinking that they will become rental apartments.

In that case, it would be no surprise to see the finishes chosen be more value-oriented, though you will see this type of thinking across most, if not all, new buildings.

This month, I took a peek at a ground-up construction project that was always destined to be a for-sale project, and a 1940’s building that had started as a hospital, was renovated to be a rental, and is now turned into a condo.

In the case of 100 Barrow Street, Toll Brothers set out to create condos, putting their signature on the West Village, by building a cooperative in conjunction with St. Luke in the Fields, the Church next door.

This was conceived as a way to circle the square.

The church sees new buildings and funds, and the developer builds in an area which is hard to acquire land sites (in this case, a parking lot!).

In the case of 416 West 52nd Street, as the finish line approached, the rental building was sold to a different

developer, who decided to

convert the building to condominium and sell the units.

The question is how condo buyers greet the final product.

Let’s see how it all turned out.

With different projects scattered about, mostly Downtown, Toll Brothers has had time to develop a good nose about what buyers are looking for.

Building only 33 units in this project gave them the ability to do larger apartments.

In this case, layouts in the building feature the same themes – open kitchens, sumptuous master suites, smaller second and third bedrooms, nice ceiling heights,

finishes that speak to the industrial tinge that this part of the West Village once embodied.

And yet I’m left with some concern that other than in the high floor units with amazing views of the city, the pricing has missed the mark.

First, as a land lease, the estimated charges of a large two-bedroom is nearly $5000 per month.

Without a 10-year tax abatement in place, these charges jump to over $8000 per month.

In a rising market, perhaps fewer buyers would focus on these charges – but the asking prices do not reflect these higher charges.

Second, I have some concerns about how the building compares with nearby projects such as 275 West 10th, which has similar carrying charges but also the added benefit of being a preexisting building with character, and has already seen significant price reductions, all with the extra benefit of being an actual condominium.

What does this mean?

The building’s charges in the case of 100 Barrow are a ground lease rent – and depending on the structure, may not be tax deductible. So, the high charges end up not carrying the same tax savings as in a condominium.

This may be a big problem for buyers.

Secondly, while the ground rent is fixed for 99 years, allowing a buyer to know what his or her charges will be into the future, the lease usually factors in resets every 15-20 years based on market conditions and taxes at that time.

I suspect that these charges always will outpace the market.

This does not factor in the potential for extra building charges that could add up, requiring the building to increase the non-ground rent portion of the charges.

All in all, a situation a bit more fraught than normal.

All of this to say that while I think the design is quite interesting, I’m very concerned about the numbers.

And I suspect that someone spending $4-12mm on an apartment may want to hear more along these lines.

On the other side, we have a 155-unit rental-gone-condo project where the pricing is far lower than 100 Barrow, in the range of $1400-1600 per square foot.

For 52nd and 10th Avenue, this initially didn’t seem like a reach, given the location is looking better all the time.

9th Avenue has become a restaurant row, and other projects in the high 40’s and low 50’s have delivered a lot of value.

Recall, however, that this building was renovated as a rental building, and it shows.

A number of glaring issues. First, there are elevators scattered throughout the building, leading to labyrinthine confusion as to where you are.

Second, the finishes are, well, less than you’d expect when paying at this level.

Third, storage and closet space are a bit lacking at every size apartment.

In the larger units, the pricing hasn’t exactly moved down on a price per square foot basis, but the monthly charges jump about 10% more.

These duplexes have a lot of square footage, but some are in basement space.

In the end, I would suspect that the pricing needs to be adjusted to accommodate for higher monthly charges and lower quality finishes.